A party wall agreement, or common wall agreement, is a legal agreement that outlines the rights and responsibilities of property owners who share a common wall or other common structure, such as a common roof or common utility lines. Party wall agreements are most often found with duplexes, townhomes, and other multi-unit structures. Although party wall agreements are not the same as a home owners association (HOA), they serve a similar purpose in that the agreement governs the individual unit owners’ rights and responsibilities with respect to the properties’ common elements. For example, party wall agreements often lay out terms regarding if, when, and how individual unit owners are responsible for common element maintenance and repairs, and also generally grant unit owners both the right to enjoy a common element, and an easement over adjoining properties for the purpose of maintaining the common element.
Oftentimes, the original owner or developer of a property will establish a party wall agreement prior to selling the property’s individual units to new owners. In such cases, the party wall agreement is also often filed in the property records prior to any sales, so that the agreement runs with the land and is binding on all future owners of the individual units. Other times however, current unit owners can enter into a new party wall agreement, or amend an existing party wall agreement.
In any event, a party wall, or common wall, agreement is an important document for properties that share common elements such as a common wall or common roof, as such agreements can help to prevent disputes between unit owners down the line.
Although the structure of a party wall agreement will vary depending on the nature of the property to which the agreement will apply, some common provisions often found in party wall agreements that should be considered by a property owner or developer include the following:
- Definition of Common Elements. The party wall agreement should carefully define all common elements the units subject to the agreement will share. Although the most common elements found in party wall agreements are shared walls and shared roofs, other elements, such as shared garages, walkways, water lines, and similar utilities, should also be considered.
- Use, Maintenance, and Repair Provisions. The party wall agreement should carefully describe what rights of use and enjoyment each common owner has in the common elements. The party wall agreement should also carefully describe how maintenance, repair, and replacement costs will both be (i) shared, and (ii) determined. Party wall agreements will typically require all common owners to share in the costs of routine maintenance or repairs, but will often require owners who are responsible for specific damage to bear the cost of any associated replacements or repairs. Additionally, where common utilities are involved, the agreement should also include mechanisms for sharing utility costs.
- Easements. The party wall agreement should carefully and clearly describe what easements are granted to adjacent property owners. An “easement” is a legal, nonpossessory right to enter onto, or use, another party’s property for a specific purpose, such as to access or make repairs to a common roof or wall. Although, again, the specific easements included in a party wall agreement will be dependent upon the nature of the property subject to the agreement, some common easements that are often granted under common wall agreements include easements for lateral support, maintenance, encroachment, utilities, and right of ways.
- Dispute Resolution Procedures/Tiebreaks. The party wall agreement should include clear rights and mechanisms for resolving disputes among unit owners, such as those involving disagreements as to whether a common element such as a roof should be replaced, or whether an individual unit owner has breached their obligations under an agreement. Although party wall agreements will often require majority, or super majority, vote for many decisions, tie break mechanisms should be included for situations where unit owners deadlock or cannot otherwise agree on material decisions. This is especially true for properties that only have two owners, such as duplexes.